Former NIB executive believed bogus account problem was ‘industry-wide’

A FORMER executive director of National Irish Bank, Barry Seymour, told the inspectors who investigated the affairs of NIB that he believed non-compliance problems within the bank related were “an industry-wide problem” with other banks similarly affected, the High Court heard yesterday.

However, Mr Seymour disagreed with the inspector’s finding in their report of July 2004 that he should have been aware, when he was in charge of the bank from 1994 to 1996, that there were widespread problems with bogus non-resident accounts in the bank. He said he would like to think that, at that time, NIB was “the one bank” which was attacking the non-compliance problem.

He said a November 1994 DIRT Team audit report did not use the word “bogus” in relation to non-resident accounts and also did not state that the problem was widespread within the bank. If he had seen that word, his approach might have been different he said. The word fictitious was referred to. He had put measures in place to tackle the problems of non-compliance.

Mr Seymour, aged 67, of Beaumond, Amersham, Bucks, England, who is opposing an application by the Director of Corporate Enforcement to restrain him from involvement in the management of any company arising from the findings of the inspectors’ report, said he was not aware there was a problem with non-compliance until the audit was carried out in November 1994.

Mr Seymour said he disputes opinions and inferences regarding his stewardship of the bank made by the inspectors. He told Mr Brian Murray SC, for the Director, that he “took issue” with and was “very sensitive” about any implication that he was involved in malpractice.

He accepted that following his appointment in late April 1994 he knew at an early stage that in some branches there was a problem with documentary compliance with DIRT for non-resident accounts. Mr Seymour said he did not know at that stage that the problem was widespread.

He had no detailed knowledge of what penalties the bank would incur due to its non-compliance but accepted it would result in a tax liability.

He agreed the November 1994 report highlighted a serious problem within the bank of non-compliance in that documents were not being properly completed for claiming non-resident DIRT status.

Mr Seymour said the step was never considered of appointing an outside auditor to review non-resident accounts.

Mr Murray was cross-examining Mr Seymour in the continuing hearing of the director’s application for an order under Section 160 of the Companies Acts restraining Mr Seymour from involvement in the management of any company.

The basis of the director’s application is the adverse findings made against Mr Seymour by the inspectors who investigated the affairs of NIB and National Irish Bank Financial Services over a ten year period to 1998.